Report: Kraft considering sale of Post

by Staff
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NORTHFIELD, ILL. — Kraft Foods Inc. is in the early stages of finding a buyer for its Post cereals business, The Wall Street Journal reported on its web site, citing people familiar with the matter. Post is the third-largest U.S. cereal maker by sales through its Grape Nuts, Raisin Bran and Honey-Comb brands, trailing only The Kellogg Co. and General Mills, Inc.

According to The Wall Street Journal, observers believe a logical bidder may be Purchase, N.Y.-based PepsiCo, Inc., whose Quaker unit owns the Cap’n Crunch and Life cereal brands. Post may fetch as much as $3 billion, one of the people said.

Kraft, the largest U.S. food company by sales, has sent financial information on the unit to potential bidders, sources said, and if the unit is successfully auctioned, a deal could be signed later this year.

Neither Kraft nor PepsiCo has commented on possible negotiations.

The speculation of a possible Post sale comes just a few weeks after Irene Rosenfeld, Kraft’s chief executive officer, said in a second-quarter earnings conference call that the company was "not finished reshaping" its portfolio.

"We continue to evaluate our existing brands in the context of our new framework and we’ll divest those businesses that don’t fit our long-term growth plan," Ms. Rosenfeld said during an Aug. 1 conference call.

In a subsequent question-and-answer session, Ms. Rosenfeld said any possible divestitures most likely would be small.

"I think we’ve got a lot of our major activity behind us," she said.

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